Peter Costello

Treasurer

11 March 1996 - 3 December 2007

Transcript of 30/04/2003

TRANSCRIPT

THE HON PETER COSTELLO MPTreasurer

Doorstop Interview

Paris

Tuesday, 29 April 2003
10.15am

SUBJECTS: European Union, trade, SARS, Iraq

JOURNALIST:

Mr Costello, thank you very much for speaking to us. A few words, if you could,
on the interaction between Australia, France and now the EU as it stands, the
plans that you have for working with the EU?

TREASURER:

Well, we see the EU as a very important partner for us. In terms of trade,
the EU as a bloc is a major investor, and a major destination for our exports,
and a major source of imports. So this is a very important trading partner for
us. We note that the EU is also going to expand, and will become a bigger economic
entity. And we seek a good, open trading relationship with the EU, which we
consider will bring benefits for both sides.

JOURNALIST:

Your approach to the situation in Iraq, what effect has that had on trade
in the Asia Pacific region, trade with the US, and trade with the EU as well?

TREASURER:

Well, as you know, Australia committed forces to the coalition of the willing
in Iraq. We thought that was important, that the democracies shoulder responsibility
in relation to that regime and its potential for weapons of mass destruction.
The war in Iraq probably had a dampening effect on growth generally. It will
mean additional costs for the countries that are involved, and in an economic
sense, it is probably a negative. But the good news is that the action has been
successful. There will be a lot of work rebuilding in Iraq, and we look forward
to assisting in that reconstruction phase, along with other countries involved.

JOURNALIST:

In your negotiations, though, and your talks about agricultural policy, particularly
with the French, do you think our position on the war has influenced - I noticed
you say you're not having any bilaterals here today with the French - has it
influenced our relationship with the French at all?

TREASURER:

I think the French government knows the Australian government's view, which
is that the common agricultural policy is not, obviously, in Australia's interests,
but we would argue not in the interests of Europe. What it has done, is, it
has protected many industries which are inefficient. Consumers could get the
benefit of lower prices if the protection were ameliorated and removed. The
money that is currently invested in inefficient production in France and Europe
could be invested in more efficient production elsewhere, and that would produce
an overall economic benefit - not just to Australia, but to the EU generally.
We would also make the point that, from the point of view of the developing
world, access to developed countries in relation to agriculture is very important
for them. And, if you like, there is a humanitarian angle to this as well. That
is our position. We will be arguing that position in the OECD Forum, we will
be arguing that position in the WTO forums, and we will be making that point
to all of our interlocutors.

JOURNALIST:

But will our arguments fall on deaf ears because of our stance on the war?

TREASURER:

Oh no, I do not think the war influences these things one way or the other.
I think the trade issues stand and fall on their own merits.

JOURNALIST:

But you don't think that the split over Iraq could contribute to a negative
climate at the upcoming talks in Cancun?

TREASURER:

I do not see why they should. The upcoming talks are about trade issues. They
stand and fall on their own merits, just as the argument in relation to Iraq
stands and falls on its own merits.

JOURNALIST:

You were talking about how the Australian economy is strongly linked to the
rest of Asia. Do you think there will be any negative fallout from SARS, when
you're talking about risks like terrorism but that seems to be an important
factor affecting tourism and other industries at the moment?

TREASURER:

Well, SARS undoubtedly will have an effect on tourist trade in Asia, particularly
in Hong Kong and China. It probably has had an effect on the tourist trade in
Australia with numbers of tourists down. But there has been no death in Australia.
There have been some cases where people have been put under observation. So
far we have managed to quarantine Australia very successfully. Conversely, it
may mean that Australians who would otherwise have travelled to Asia, spend
their tourist dollar at home. But I cannot pretend that SARS is good for anybody.
It is a terrible worry for the countries concerned, it is bad for tourism, and
it will affect the economies of those countries most directly affected, I would
think.

JOURNALIST:

Continuing agricultural questions, do you think that the dialogue is still
possible and really possible between the European and Cairns Group?

TREASURER:

Well, we want to continue to engage in that dialogue, and we will argue our
case. And our case is essentially this. It is, of course, it is in the interests
of efficient agricultural producers to have trade liberalisation. But we would
argue it is also in the interests of those countries that currently have protected
or subsidised industries. That they can save themselves a lot of subsidies,
their consumers can get access to cheaper prices, and their economy will benefit
if the money is invested in efficient enterprises, rather than inefficient ones.
That is our case, that is the dialogue that we will be having. We will try and
explain our position to France.

JOURNALIST:

Which part will play Australia in nation building of Iraq?

TREASURER:

Well, Australia is going to help in reconstruction with aid, which we have
already announced. We have made personnel available. We, for example, are providing
air services, flight controllers to help re-establish the aviation links. We
still have numbers of military personnel which are helping in relation to security.
And we will be offering assistance in specialised areas where Australia has
international skill.

JOURNALIST:

Which kind of areas?

TREASURER:

Well, we have got areas in relation to, areas like agriculture and other areas
where we have international skill.

JOURNALIST:

Have you an idea of the cost of the Australian government of the war, of the
Australian contribution to the war?

TREASURER:

Of the military contribution?

JOURNALIST:

And maybe the national rebuilding?

TREASURER:

Well, look, I have previously said that the cost of Australia's engagement
is hundreds of millions of dollars, but I am not going any further and being
any more specific than that.